The supply of new single-family homes is declining, while an acceleration in multifamily construction is creating more rental units.
Those two factors are causing renter households to grow three times faster than homeownership, according to a new report. redfin tuna crunchy U.S. Census Bureau Data goes back to 1994.
In the second quarter of 2024, the number of renting households in the United States increased by 1.9% annually, reaching 45.2 million people. Meanwhile, the number of homeownership households grew by just 0.6%, to 86.3 million. The annual growth rate of renter households peaked at 2.8% in the first quarter of 2024, while the growth rate of owner-occupied households in the second quarter of 2024 was the lowest since 2019.
“The cost of renting and owning a home has soared in recent years, but the affordability crunch in the rental market has been less severe,” Sheharyar Bokhari, senior economist at Redfin, said in a statement. “That’s because the U.S. has been building so many apartments. , to meet strong demand from renters. This is a lesson the country’s leaders should learn as they consider how to make the home-buying market more affordable: When more housing is available, prices don’t rise as fast.
The growth of both types of families is driven by the same factors.
In fact, the total number of households in every category is at an all-time high, simply as a result of population growth. Redfin says the cost of buying a home is rising much faster than the cost of renting, putting home ownership out of reach and causing sales to slow. As new multifamily construction comes online, more units are available for tenants to build new families.
The report shows that the annual growth rate of new multifamily housing in the United States was 563,000 units in the second quarter, which is the second fastest data since 1994 and is second only to the growth rate in the first quarter of 2024. Rental prices have risen sharply since the easing of the post-pandemic boom, which will put upward pressure on rental prices overall.
